Current Law Journal

14 Reprint [1992] 1 CLJ (Rep)

a BANK NEGARA MALAYSIA

v.
MOHD. ISMAIL ALI JOHOR & ORS.
SUPREME COURT, KUALA LUMPUR
MOHD. AZMI SCJ
b MOHD. JEMURI SERJAN CJ (BORNEO)
GUNN CHIT TUAN SCJ
[CIVIL APPEAL NO. 03-67 OF 1989]
27 JANUARY 1992
CIVIL PROCEDURE: Summary judgment - Order 14 r. 3(1) Rules of the High Court 1980.
c This is a claim by the plaintiff for liquidated damages of RM70,000 for breach of a scholarship
agreement by the 1st respondent with the 2nd and 3rd respondents as guarantors. The Senior
Assistant Registrar was satisfied on affidavit evidence and granted the plaintiff’s application
for summary judgment and entered judgment against the three respondents. On appeal to a
Judge in Chambers the SAR’s order was set aside. The plaintiff appealed.
d The plaintiff’s personnel manager in his affidavit affirmed inter alia that the 1st respondent
having commenced serving the appellant on 1 June 1984 left on 3 November 1984 in breach
of the said agreement.
He also affirmed that the 1st respondent had admitted the plaintiff’s claim vide three letters
written by him in response to the plaintiff’s claim.

e The respondents alleged as follows:

(i) The appellant had in breach of the agreement failed to provide the 1st respondent with
a post consistent with his qualification.
(ii) The appellant’s claim was time barred.
(iii) The appellant had waived his right under the agreement.
f
Held:
[1] Under O. 14, when a fact is asserted by one party and denied by another, and such
denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary
documents or other statements by the same deponent or is inherently improbable in itself
the Judge has a duty to reject such assertion or denial, thereby rendering the issue as not
g triable.
[2] The 1st respondent had admitted liability to pay RM70,000. His assertion that the post
given to him was inconsistent with his legal qualification was equivocal and lacking in
precision and was never raised as a basis for extinguishing his liability in any of his three
letters.

h [Appeal allowed.]
Gunn Chit Tuan SCJ (dissenting)
The respondent’s case is not uncontestable. The words used in O. 14 r. 3(1) is that the
defendant should have leave to defend if he satisfied the Court “that there ought for some
other reason to be a trial”.
i
 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 15

[Bahasa Malaysia Translation of headnote] a

PROSEDUR SIVIL: Penghakiman terus - Aturan 14 kaedah 3(i) - Kaedah-kaedah

Mahkamah Tinggi 1980.
Plaintif berdasarkan satu tuntutan mohon ganti-rugi jumlah tertentu sebanyak RM70,000 kerana
kemungkiran perjanjian biasiswa oleh responden pertama bersama dengan responden kedua
dan ketiga sebagai penggerenti. Penolong Kanan Pendaftar puashati atas bukti affidavit b
membenarkan permohonan plaintif untuk penghakiman terus dan memasukkan penghakiman
terhadap ketiga-tiga responden. Berasaskan rayuan pada Hakim dalam kamar perintah SAR
itu diketepikan. Plaintif membuat rayuan.
Pengurus sumber manusia plaintif dalam affidavit inter alia berikrar bahawa responden
pertama setelah mula berkhidmat dengan perayu pada 1 Jun 1984 tamatkan perkhidmatan c
tersebut pada 3 November 1984 dengan kemungkiran perjanjian itu.
Responden mengata seperti berikut:
(i) Perayu melakukan kemungkiran sekiranya perjanjian itu tidak memberikan responden
pertama satu jawatan yang konsisten dengan kelayakan beliau .
(ii) Tuntutan perayu tertakluk kepada limitasi masa. d
(iii) Perayu sudah menepikan hak beliau di bawah perjanjian itu.
Diputuskan:
[1] Di bawah Aturan 14, apabila fakta tertentu dinyatakan oleh satu pihak dan ditolak oleh
yang lain, dan penolakkan itu meragukan atau tidak tepat atau tidak konsisten dengan dokumen
semasa dan kenyataan lain yang belum dipersoalkan itu oleh deponen yang sama atau pada e
asas kebenaran dengan sendirinya tidak wajar, maka Hakim tersebut wajib membatalkan
penekanan atau penolakan yang dikemukakan itu dengan memutuskan bahawa isu itu tidak
boleh dibicarakan.
[2] Responden pertama pernah mengaku liability pada jumlah wang sebanyak RM70,000.
Penekanan beliau bahawa jawatan yang diberikan padanya tidak konsisten dengan kelayakan
f
perundangan meragukan dan tidak tepat dan tidak pernah dibangkitkan sebagai asas untuk
menghapuskan liabiliti dalam mana-mana dari ketiga-tiga surat-surat itu.
[Permohonan dibenarkan]
Gunn Chit Tuan HMA (menentang)
Kes responden bukanlah yang tidak boleh dibicarakan. Perkataan yang digunakan dalam g
Aturan 14 kaedah 3(1) nyatakan bahawa defendan hendaklah diberi kebenaran membela
sekiranya bahawa “that there ought for some other reason to be a trial”.
[Ed. Note: The High Court Judgment was reported in [1992] 2 CLJ (Rep) 186]
Cases referred to:
Anglo-Italian Bank v. Wells 38 LT 201 (foll) h
Ooi Boon Leong v. Citibank NA [1984] 1 MLJ 222 (foll)
Alloy Automotive Sdn. Bhd. v. Perusahaan Ironfield Sdn. Bhd. [1986] CLJ (Rep) 45 (cons)
Blaiberg v. Abrams [1977] LTJ 255 (cons)
Eng Mee Yong & Ors. v. V.Letchumanan [1979] 2 MLJ 212 (foll)
Cow v. Casey [1949] All ER 197 (cons)
European Asian Bank Ag. v. Punjab & Sind Bank [1983] 2 All ER 508 (cons)
Govt. of Malaysia v. Adnan bin Awang & Ors. [1980] 2 MLJ 291 (cons) i
Payana Reena Saminathan & Anor. v. Pana Lana Palaniappa [1914] AC 618 (foll)
 Current Law Journal
16 Reprint [1992] 1 CLJ (Rep)

a Gunung Bayu Sdn. Bhd. v. Syarikat Pembinaan Perlis Sdn. Bhd. [1987] CLJ (Rep) 120 (foll)
Jacobs v. Booth’s Distillrey Co. [1901] 85 LT 262 (foll)
Manager v. Cash [1889] 5 TLR 271 (foll)
Miles v. Bulls [1969] 1 OB 258 [1968] 3 All ER 632; [1893] 9 TLR 328 (foll)
Llyod’s Banking Co. v. Ogle [1876] 1Ex D 263 (foll)
UMBC Ltd v. Ipoh Mining Co. (M) Ltd. [1964] MLJ 69 (foll)
Ho Chooi Soon v. The Indian Overseas Bank Ltd. [1961] MLJ 86 (foll)
b Wing v. Thurlour [1983] 10 TLR 151 (foll)

Legislation refered to:

Rules of the High Court 1980, O. 14 r. 1, 3(1), O.27, O.81
Contracts Act 1950, s. 63
For the appellant - C.V. Das (John Mathew with him); M/s. Shook Lin & Bok
c For the respondents - Joseph Yeo; M/s. Anis, Mohd. Ismail & Co.

JUDGMENT
Mohd. Azmi SCJ:
This appeal concerned a claim by Bank Negara Malaysia for liquidated damages in the sum
d of RM70,000 (Ringgit seventy thousand only) for breach of a scholarship agreement entered
into on 21 July 1980 between the bank and the scholar, the 1st respondent with the 2nd and
3rd respondent as guarantors. In an application for summary judgment under O. 14 Rules of
the High Court 1980, the Senior Assistant Registrar was satisfied on affidavit evidence that
there was no triable issue and accordingly entered judgment against the three respondents
on 24 August 1988. On an appeal to a Judge in chambers, the learned Judge set aside the
e order of the SAR and issued a certificate of no further argument. On further appeal by the
bank, we restored the order of the SAR by a majority decision (Gunn Chit Tuan SCJ
dissenting).
At the conclusion of the appeal, we indicated that we would give our reasons and we do so
now.

f From the scholarship agreement, there was no dispute that it was the scholar, the 1st defendant
in the Court below who approached the bank for a grant of scholarship to enable him to
pursue a course of study in the University of Malaya leading to the award of an Honours
Degree in Law. The bank agreed to grant the scholarship upon the terms and conditions
contained in the agreement. One of these conditions which formed the consideration for the
grant of the scholarship was contained in Clause l(c) of the agreement which provided:
g 1. The Scholar with the approval and consent of the Sureties, hereby agrees:
(a) ...
(b) ...
(c) that he will upon being required to do so by The Bank or any Ministry or body
(whether corporate or unincorporate that may be so determined by the bank in a
h post consistent with the qualifications obtained by The Scholar to which he may be
appointed for a period of ten (10) years from the date of his appointment upon the
terms and conditions for the time being usually applicable to such post and at a
salary in accordance with the scales of salaries for the time being in force relating
thereto.

i
 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 17

This was followed by Clause 3(e) in which the scholar agreed: a

(e) in the event of The Scholar leaving the service of The Bank or the Ministry or body
(whether corporate or unincorporate) that The Scholar may be required by The Bank
to serve before fulfilling his obligation under this agreement to serve The Bank or the
Ministry or body (whether corporate or unincorporate) for a period of ten (10) years
The Scholar and The Sureties shall be jointly and severally liable for themselves,
their heirs, executors, administrators and assigns to pay to The Bank on demand by b
way of liquidated damages the sum of ringgit Seventy Thousand Only (RM70,000).
In support of the application for summary judgment Encik Nordin Haji Nasir, the Personnel
Manager of Bank Negara in his affidavit sworn on 18 January 1988 affirmed inter alia that:
4. By the said agreement and in consideration of the plaintif granting him a scholarship to
pursue a course of study the 1st defendant inter alia undertook to serve the plaintif c
for a period of ten years upon completion of the said studies.
5. In breach of the said agreement the 1st defendant left the service of the plaintif without
completing the 10 years as agreed.
6. In response to demands from the plaintif and/or its solicitors the 1st defendant, inter
alia, admitted the plaintif's claims. There is now shown before me a letter of admission d
and marked as Exhibit BNM2.
There were three letters written by the scholar which were relevant on the issue of admission
of liability. The first letter with the address of the scholar given as “Jabatan Pengawalan
Bank, Bank Negara Malaysia” was the resignation letter dated 3 October 1984 as follows:
Tuan, e
Perletakan Jawatan sebagai Pegawai Pentadbiran
Berhubung dengan perkara di atas, dengan ini saya memberi notis 1 (satu) bulan, seperti yang
dikehendaki dalam surat lantikan saya bertarikh 13 Julai 1984 (Bilangan: Est 200), meletakkan
jawatan sebagai Pegawai Pentadbiran di Bank Negara Malaysia.
2. Sebagai bekas pemegang biasiswa Bank Negara, saya akui bahawa saya tertakluk dengan
f
syarat-syarat perjanjian biasiswa yang ditandatangani oleh saya dengan Bank Negara pada 21
Julai 1980 yang mana saya dikehendaki membayar RM70,000 kepada pihak bank sekiranya
saya meninggalkan bank sebelum habis tempoh perkhidmatan 10 tahun.
3. Sekiranya saya memulakan perkhidmatan di pekerjaan lain, saya berjanji untuk membayar
balik jumlah RM70,000 ini secara ansuran dalam tempoh 15 tahun, menurut kadar yang
berpatutan yang ditetapkan oleh Bank Negara.
g
4. Saya juga faham bahawa surat pemberian notis sebulan perletakan jawatan ini dianggap
berkuatkuasa selepas tempoh tersebut sekiranya saya tidak mengemukakan surat menarik balik
keputusan ini.
Sekian, terima kasih.
Yang benar,
h
t.t
(Mohd. Ismail Ali Johor)
The second letter was dated 14 December 1984, which appeared on p. 77 of the appeal record,
and in that letter the scholar referred to his letter of resignation where he had requested for
fifteen years within which to pay the bank the RM70,000 liquidated damages. After being i
 Current Law Journal
18 Reprint [1992] 1 CLJ (Rep)

a informed that the request had been turned down, he wrote the second letter to the bank to
allow him to pay within eight years instead of fifteen years.
Exhibit BNM2 was the third letter written by the scholar dated 24 December 1985 and it
contained an unequivocal admission of liability for breach of the scholarship agreement. The
scholar reiterated his request to pay the agreed liquidated damages by instalments. The letter
addressed to the solicitor of Bank Negara and copied to the guarantors is set out below:
b
Dear Sir,
Re: Breach of Scholarship Agreement
The above mentioned matter and your demand letter dated 10 December 1985 refers.
I would like to inform you and your clients that I was just admitted to the Malaysian Bar on
c 24 August 1985 and now I am only working as a legal assistant in a legal firm. Hence, my
income are fixed and it is really impossible for me to raise the said sum of RM70,000 within
fourteen (14) days or even years in lump sum.
By virtue of the above and the state of financial difficulties I am at present, I humbly request
and shall appreciate if your clients could accept my proposal to pay the sum of RM70,000
by way of monthly instalment to commence immediately in the following manner:
d 1. RM400 x 12 = RM 4,800
2. RM500 x 12 = RM 6,000
3. RM600 x 24 = RM14,400
4. RM700 x 64 = RM44,800
Total = RM70,000
e
As I am very new to this practising world, I hope you and your clients would appreciate
that legal proceedings may certainly affect my prospects. Most certainly should execution
proceedings be levied for the lump sum it may halt my career which will not benefit anyone.
While I was working with your clients, I found that there was no post for legal officer and
the post that was given to me was only as an administrative officer and your clients day by
day give me hope that they are going to set up a legal department. However as I waited
f
patiently there were not even a proposal to set up such department and as such my knowledge
accumulated would have been of no avail. Due to this I decided to put to good use of my
qualifications and join the private sector as legal assistant.
Nevertheless I do not wish to evade liability but satisfy your clients claim within my means.
I sincerely hope you can convey my proposal to your clients and urge them to accept the
g same or if my proposal is not acceptable I will be grateful to receive a reasonable counter-
proposal from your end.
Thanking you.
Yours sincerely,
t.t
h c.c: Guarantors
In his written judgment, the learned Judge delved in the principles to be applied under an
O. 14 application and referred to the case of Anglo-Italian Bank v. Wells 38 LT 201 for the
proposition that “when the Judge is satisfied not only that there is no defence but no fairly
arguable point to be argued on behalf of the defendant, it is his duty to give judgment for
i
 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 19

the plaintif”. Apparently the learned Judge found some difficulties in the application of the a
words “no fairly arguable point to be argued”, and he attempted to formulate some sort of
definition for those words. He then referred to the Privy Council case of Ooi Boon Leong &
Ors. v. Citibank NA, [1984] 1 MLJ 222 for the proposition that if the defence can raise serious
questions in law or fact to resist the plaintif’s claim, summary proceeding under O. 14 is not
deemed appropriate. According to the learned Judge it has been said that even though the
defendants may not be able to pin-point any precise “issue or question in dispute which b
ought to be tried”, but nevertheless if it is apparent to the Court that for some other reasons
there ought to be trial, judgment should not be given under O. 14. It seemed to us that this
last statement might have been drawn from the judgment in Alloy Automotive Sdn. Bhd v.
Perusahaan Ironfield Sdn. Bhd. [1986] CLJ (Rep) 45 where Lee Hun Hoe CJ in dealing with
summary jurisdiction conferred by O. 81, RHC had this to say at p. 57:
A defendant ought not to be shut out from defending unless it is very clear that he has no
c
case in the action. A complete defence need not be shown. The defence set up need only
show that there is a triable issue or question or that for some reason there ought to be a trial.
The learned Judge also referred to the statement of Bowen LJ in Blaiberg v. Abrams, [1977]
LTJ 255 for the proposition that although the Court was not bound to require documentary
evidence from the plaintif, however, if he elected to produce one in an affidavit to support d
his application or in an affidavit in reply, then the Court was bound to look at all the
circumstances before deciding whether the defence set up is a bona fide defence.
In our view, basic to the application of all those legal propositions, is the requirement under
O. 14 for the Court to be satisfied on affidavit evidence that the defence not only has raised
an issue but also that the said issue is triable. The determination of whether an issue is or
is not triable must necessarily depend on the law arising from each case as disclosed in the e
affidavit evidence before the Court. On the treatment of conflict of evidence on affidavits,
Lord Diplock speaking for the Privy Council in Eng Mee Yong & Ors. v. V.Letchumanan
[1979] 2 MLJ 212 had this to say at p. 217:
Although in the normal way it is not appropriate for a Judge to attempt to resolve conflicts
of evidence on affidavit, this does not mean that he is bound to accept uncritically, as raising
a dispute of fact which calls for further investigation, every statement on an affidavit however
f
equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other
statements by the same deponent, or inherently improbable in itself it may be.
Although Lord Diplock was dealing with an application for removal of caveat in that particular
case, we are of the view that the above principle of law is relevant and applicable in all
cases where a Judge has to decide a case or matter on affidavit evidence. g
Under an O. 14 application, the duty of a Judge does not end as soon as a fact is asserted
by one party, and denied or disputed by the other on affidavit. Where such assertion, denial
or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary
documents or other statements by the same deponent or is inherently improbable in itself,
then the Judge has a duty to reject such assertion or denial, thereby rendering the issue as
not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to h
exercise his discretion judicially under an O. 14 application. Thus, apart from identifying the
issues of fact or law, the Court must go one step further and determine whether they are
triable. This principle is sometimes expressed by the statement that a complete defence need
not be shown. The defence set up need only show that there is a triable issue.

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 Current Law Journal
20 Reprint [1992] 1 CLJ (Rep)

a Where the issue raised is solely a question of law without reference to any facts or where
the facts are clear and undisputed, the Court should exercise its duty under O. 14. If the
legal point is understood and the Court is satisfied that it is unarguable, the Court is not
prevented from granting a summary judgment, merely because “the question of law is at first
blush of some complexity and therefore takes a little longer to understand”. (See Cow v.
Casey [1949] AER 197; and European Asian Bank AG v. Punjab & Sind Bank [1983] 2 AER
b 508 at 516).
The fundamental question in this appeal was whether the learned Judge had applied the
principles to which we had alluded, to the facts and circumstances of the present case. The
learned Judge identified the first issue to be the failure of the appellant bank to appoint the
scholar in a post consistent with his legal qualification. In the memorandum of appeal, the
appellant bank contended that the learned Judge erred in law in regard to the scholar’s
c
defence that it was a condition precedent under the scholarship agreement that the scholar
should be given a post consistent with the qualifications obtained by him and that the
appellant’s alleged breach of it extinguished his obligations under the agreement. Based on
the scholar’s letter of resignation dated 3 October 1984 and the other two letters of admission
of liability to pay RM70,000 damages, it was clear that his present assertion on the issue of
liability was absolutely inconsistent with the three undisputed contemporary documents. His
d
assertion that the post given to him was inconsistent with his legal qualification was also
equivocal and lacking in precision having regard to the obvious fact that he knew or ought
to know when he entered into the scholarship agreement that at all material times the appellant
was engaged in the business of central banking and not the business of a legal firm. On
completion of his law studies, the scholar was attached to “the Bank Regulations Department
whose function was to administer all legislation relating to banks”. The scholar construed
e
the post as merely administrative since the appellant had not set up its own legal department.
To him the post was inconsistent with his qualification. The learned Counsel for the appellant
argued that whether the post was or was not consistent with his legal qualification was a
subjective question. We would say that being employed for only four months after graduation,
it would be presumptuous for any new law graduate to suggest that working in the
Regulations Department of Bank Negara Malaysia was completely out of place with his first
f
degree law qualification. Be that as it may, the complaint regarding unsuitability of the post
though mentioned in the third letter, was never raised as a basis for extinguishing his liability
in any of the three contemporaneous letters written by the scholar. We therefore held the
view that the learned Judge erred in law in taking the assertion as a triable issue on affidavit
evidence, having regard to the unequivocal admission of liability under the scholarship
agreement to pay the appellant RM70,000 for breach of contract. Liability was admitted without
g
qualification, and only the mode of payment was in dispute.
The second issue identified by the learned Judge was said to be one of estoppel which
allegedly involved both questions of law and fact. The learned Judge entertained the scholar’s
assertion that the appellant bank was estopped from instituting the suit since it had in
September 1986 agreed not to take any action against him if he consented to serve as a
h legal officer in the Attorney-General’s chambers. Regretfully, we could not find any evidence
to support such an undertaking by the bank to relieve the scholar from liability under the
scholarship agreement, although the party to benefit from the contract may change, as
envisaged in Clause l (c) and (e). The alleged estoppel arose from a letter written by the
appellant bank dated 22 September 1984 to the Attorney-General and copied to the scholar.
The letter reads:
i
 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 21

Tuan, a
Permohonan Berkhidmat Dengan Jabatan Peguam Negara - Encik Mohd. Ismail bin Ali Johor
Dengan hormat, saya merujuk kepada permohonan Encik Mohd. Ismail bin Ali Johor (bekas
kakitangan Bank Negara Malaysia) bertarikh 15 September 1986, dan dengan ini mengesahkan
bahawa pihak Bank Negara Malaysia bersetuju memindahkan perjanjian perkhidmatan beliau
kepada Jabatan Peguam Negara. Pemindahan ini tertakluk kepada Encik Mohd. Ismail berkhidmat
dengan Jabatan Peguam Negara selama tempoh kontrek beliau. b
Sekian dimaklumkan.
Yang benar,
t.t.
(Sharifah Mariah Alfah) c
Pengurus,
Bahagian Personel.
The learned Judge rightly reminded himself that this letter was sent in September 1986, that
is, before the scholar put in his resignation letter of 3 October 1984. But what his Lordship
had apparently failed to appreciate was that if the scholar had been successful in his d
application for a post in the Attorney-General’s Department, there would have been a novation
or assignment of the scholarship agreement, and the scholar would then have been obliged
to work in the Attorney-General’s Department for the balance of the ten years. However, it
was an undisputed fact that the scholar’s application was rejected by the relevant Service
Commission and he never got the job in the Attorney-General’s Department.
e
On the admitted facts we failed to see how there could be estoppel by conduct. The
contingency or condition precedent to which the appellant bank had agreed to release the
scholar’s services in favour of the Attorney-General’s Department had not occurred
notwithstanding the fact that the scholar only came to know officially of the rejection on 6
October 1987, that is, about 3 years after he had put in his resignation letter. If the affidavit
evidence had been critically analysed, it would be plain to conclude that the appellant bank
f
would have no choice but to withdraw the present suit filed on 13 December 1986, if the
intended novation or assignment of the scholarship agreement had gone through. On the
basis of the bank’s letter dated 22 September 1984, for any novation or assignment of right
to be effective, the scholar must first be employed by the Attorney-General’s Department.
But unfortunately for the scholar, this did not materialise. On the facts and circumstances of
this case, we were of the opinion that the issue of estoppel ought to have been rejected
g
having regard to the facts and circumstances of the case. The learned Judge ought to have
resolved the assertion on estoppel, based on the uncomplicated facts and the law, without
sending it for trial. For similar reasons we were also not impressed with the new argument
on waiver by the learned Counsel of the respondents. What the learned Counsel termed as
waiver was in actual fact a contingency agreement on novation or assignment of right, and
for reasons already stated, the scholar would not possibly bring himself within either s. 63
h
of the Contracts Act (see Government of Ma1aysia v. Adnan bin Awang & Ors. [1980] 2
MLJ 291 or the common law principle as enunciated in Payana Reena Saminathan & Anor.
v. Pana Lana Palaniappa [1914] AC 618 at 622. There was obviously no triable issue either
on estoppel or waiver.

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 Current Law Journal
22 Reprint [1992] 1 CLJ (Rep)

a It is unfortunate that the issue of estoppel which in our view was a red herring, had clouded
his Lordship’s decision on the importance of the three letters which separately and
cumulatively contained a clear an admission of liability by the scholar to pay the appellant
bank RM70,000 as liquidated damages for breach of the scholarship agreement. His Lordship
was of the opinion that even assuming that any of the letters to be admission of liability, it
would still be debateable whether the appellant bank was not precluded from relying on the
b admission by reason of the alleged estoppel by subsequent conduct. As a matter of law we
must disagree, having regard to the clear absence of triable issue on estoppel.
In our opinion, the learned Judge had erred in law in not exercising his discretion judicially
under O. 14 by accepting uncritically the assertions of the scholar made on behalf of all the
respondents, although they were equivocal, lacking in precision and as well as inconsistent
with undisputed contemporary documents. In the event, this Court was entitled to hear full
c
arguments on the legal points and exercised its power to grant summary judgment under
O. 14 to the appellant instead of sending it back to the High Court.
We had therefore allowed this appeal by setting aside the order of the High Court and
restoring the original order of the Senior Assistant Registrar. At our request, learned Counsel
for the appellant agreed to advise his client to allow the respondents to pay the judgment
d sum by instalments to alleviate his financial difficulties in meeting his liabilities under the
scholarship agreement. We also ordered that each party to pay its costs in this appeal.
Gunn Chit Tuan SCJ (Dissenting):
Bank Negara Malaysia ( hereinafter referred to as “the appellant”) had instituted an action
against one Mohd. Ismail bin Ali Johor and two others (hereinafter referred to as “the
e respondents”). In a statement of claim dated 13 December 1986, it was alleged that by an
agreement in writing dated 21 July 1980, in consideration of the appellant granting the said
Mohd. Ismail bin Ali Johor a scholarship to pursue a course of study in the University of
Malaya leading to the award of an Honours Degree in Law, the first respondent undertook
to serve the appellant for a period of ten years upon completion of his studies, failing which
he would pay the appellant liquidated damages of RM70,000. It was also alleged that the
f first respondent, having commenced serving the appellant on 1 June 1984, left on 3 November
1984, in breach of the said agreement. The other two respondents were sued in their capacity
as guarantors for the due performance of the said agreement.
In a joint statement of defence, the respondents claimed that the appellant had breached a
condition of the agreement by failing to provide the first respondent with a post consistent
with the qualification obtained by him and that the obligation of the first respondent to serve
g the appellant under the said agreement was extinguished. It was also averred that in any
event the sum of RM70,000 was a penalty claim which was time barred as the action was
filed after the expiry of one year from the date of the breach. In the further alternative, it was
averred that the appellant had waived its right under the agreement as it had entered into a
new agreement with the respondents whereby it agreed not to claim the said sum of RM70,000
in the event that the first respondent was prepared to work in the Attorney-General’s
h Chambers. The first respondent accepted that offer when he applied to the Attorney-General’s
Chambers for a post on 15 September 1984, and attended several interviews but was not
successful when he received a letter dated 6 October 1987, from the Attorney-General’s
Chambers. It was contended that at any rate the appellant was estopped from claiming against
the respondents.
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 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 23

On 18 January 1988, the appellant applied under O. 14 of the Rules of the High Court 1980, a
for summary judgment and not under O. 27 of the said Rules for judgment on admission. In
an affidavit in support affirmed by the Personnel Manager of the appellant, it was asserted
that in response to demands from the appellant, the first respondent admitted the appellant’s
claim and a letter written by the first respondent dated 24 December 1985 (p. 59 of the appeal
records) was annexed to the said affidavit to show the extent of the admission. The first
respondent filed an affidavit in reply and produced some contemporaneous letters to support b
the claims made by him in the joint statement of defence. The second respondent also filed
an affidavit to oppose the appellant’s application. In addition to adopting the points raised
by the first respondent, the second respondent also stated that the appellant had varied the
agreement by increasing the scholarship grants without the knowledge and consent of both
guarantors who were therefore discharged from their obligations.
c
In answer to the first respondent’s claims, the appellant filed another affidavit exhibiting a
letter written by the first respondent on 14 December 1984 (p. 77 of the appeal records),
which the appellant claimed amounted to an admission on the part of the first respondent
regarding his breach of the agreement and an offer made to pay the sum of RM70,000 by
monthly instalments. Lim Beng Choon J, who heard this application in the High Court at
Kuala Lumpur, cited Jessel MR in Anglo-Italian Bank v. Wells [1878] 39 LT 197 that “when
d
the Judge is satisfied not only that there is no defence but no fairly arguable point to be
argued on behalf of the defendant it is his duty to give judgment for the plaintif.” The
learned Judge however stressed that the important words were “no fairly arguable point to
be argued”, and stated, after referring to the Privy Council case of Ooi Boon Leong & Ors.
v. Citibank NA [1984] 1 MLJ 222 that if the defence can raise serious questions on law or
fact to resist the plaintif’s claim, summary proceedings under O. 14 were not appropriate. His
e
Lordship also pointed out that even if a defendant may not be able to pin-point any precise
issue or question in dispute which ought to be tried but nevertheless if it is apparent to the
Court that there ought for some other reason to be a trial on that claim, judgment should
not be given under O. 14. Lastly the learned Judge referred to Blaiberg v. Abrams [1910] 77
LTJ 255, in which Bowen LJ has stated that “in deciding whether the defence set up is a
real defence or not, all the circumstances must be looked at”.
f
Applying the principles enunciated in the cases referred to by him, the learned Judge noted
that the first issue raised by the defence was that since the appellant had failed to appoint
the first respondent to a post which was consistent with his legal qualifications, it had
breached the following terms of the agreement:
(i) 1(a) xxx
g
(b) xxx
(c) that he will upon being required to do so by The Bank serve The Bank or any
Ministry or body (whether corporate or incorporate) that may be so determined by
The Bank in a post consistent with the qualifications obtained by The scholar to
which he may be appointed for a period of Ten (10) years from the date of his
appointment upon the terms and conditions for the time being usually applicable to h
such post and at a salary in accordance with the scales of salaries for the time being
in force relating thereto.;
(ii) 3 (a) xxx
(b) xxx
(c) xxx
i
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24 Reprint [1992] 1 CLJ (Rep)

a (d) that upon his being appointed in accordance with Clause 1(c) above, to a post
consistent with the qualifications obtained by him, The scholar undertakes upon being
so required to do by The Bank to provide a fidelity bond or other appropriate
guarantee for his continued service with The Bank or the Ministry or body (whether
corporate or incorporate) that The Scholar may be required by The Bank to serve
for a period of Ten (10) years such bond or guarantee providing inter alia against:

b (i) his resignation or leaving the service in breach with this agreement;
(ii) or his dismissal for misconduct including negligence or indifference to his studies
under this agreement; or
(iii) his refusal to serve in any post, appropriate to his qualifications and the exigencies
of the service, to which he is appointed.

c The first respondent also produced the letter written by him to the Attorney-General dated
15 September, 1985, wherein it was stated ‘inter alia’ that “Sebelum saya berkhidmat dengan
firma guaman tersebut saya pernah berkhidmat sebagai Pegawai Pentadbiran selama Empat
(4) bulan di Bank Negara Malaysia, Kuala Lumpur.” The learned Judge also observed that in
a letter written by the first respondent on 24 December 1985, it is stated that:
While I was working with your clients, I found that there was no post for legal officer
d and the post that was given to me was only as an administrative officer and your
clients day by day give me hope that they are going to set up a legal department.
However, as I waited patiently there were not even a proposal to set up such
department and as such my knowledge accumulated would have been of no avail.
Due to this I decided to put to good use of my qualifications and join the private
sector as legal assistant.
e
That first issue could only, in the learned Judge’s opinion, be resolved at a trial proper.
The second issue involved the first respondent’s claim that the appellant was estopped from
instituting the suit as it had in September 1984 agreed not to take any action against the
first respondent if he consented to serve as a legal officer in the Jabatan Peguam Negara. In
support of his claim, the first respondent exhibited a letter written by the appellant dated 22
f September, 1984, to the Attorney-General and copied to the first respondent (p. 66 of the
appeal records), in which it was stated as follows:
Tuan,
Permohonan Berkhidmat Dengan Jabatan Peguam Negara
Encik Mohd. Ismail Bin Ali Johor
g
Dengan hormat, saya merujuk kepada permohonan Encik Mohd. Ismail bin Ali Johor (bekas
kakitangan Bank Negara Malaysia) bertarikh 15 September 1984, dan dengan ini mengesahkan
bahawa pihak Bank Negara Malaysia bersetuju memindahkan perjanjian perkhidmatan beliau
kepada Jabatan Peguam Negara. Pemindahan ini tertakluk kepada Encik Mohd. Ismail berkhidmat
dengan Jabatan Peguam Negara selama tempoh kontrek beliau.

h Sekian dimaklumkan.
Yang benar,
(Sharifah Mariah Alfah)
Pengurus,
Bahagian Personel.
i
 Bank Negara Malaysia v.
[1992] 1 CLJ (Rep) Mohd. Ismail Ali Johor & Ors. 25

The learned Judge considered that as the appellant’s cause of action was based on the breach a
of the agreement when the first respondent left its service on 3 November 1984, the above
letter might support his allegation of estoppel as the first respondent relying on that
representation had applied for a post of legal officer in the Jabatan Peguam Negara. His
Lordship again considered that that was a triable issue because it was necessary to find out
why the appellant wrote the said letter and what was the legal effect of the representation
made in it. For the reasons stated in his grounds of judgment, the learned Judge was satisfied b
that the appellant was not entitled to obtain summary judgment under O. 14 and therefore
allowed the appeal of the first respondent against the order of the Senior Assistant Registrar
in granting judgment to the appellant.
I would with respect agree that the first issue which ought to be tried is whether the appellant,
as alleged by the respondents in their joint statement of defence, had breached a condition
c
of the said agreement by failing to provide the first respondent with a post consistent with
the qualifications obtained by him and that the obligation of the first respondent to serve
the appellant under the said agreement has therefore been extinguished. Then there is also
the issue as to whether the action of the appellant was time-barred when it was instituted
against the respondents. Again I would agree that yet another issue to be tried is whether
the appellant had waived its right under the said agreement as it had, as alleged by the
d
respondents, entered into a new agreement with the first respondent and was therefore
estopped from claiming against the respondents. All these issues ought, as considered by
the learned Judge with whom I agreed, to be tried and decided at a proper trial.
The scope of O. 14 proceedings meant for cases which are virtually uncontested or
uncontestable is now determined by the Rules of the High Court 1980. Generally where a
defendant shows that he has a fair case for defence, or reasonable grounds for setting up a e
defence, or even a fair probability that he has a bona fide defence, he ought to have leave
to defend. Order 14 is not intended to shut out a defendant. The jurisdiction should only be
exercised in very clear cases. (Malayan Insurance (M) Sdn. Bhd. v. Asia Hotel Sdn. Bhd.
[1987] CLJ (Rep) 182; Gunung Bayu Sdn. Bhd. v. Syarikat Pembinaan Perlis Sdn. Bhd. [1987]
CLJ (Rep) 120). It was held in the well-known House of Lords’ case of Jacobs v. Booth’s
Distillery Co. [1901] 85 LT 262 that a complete defence need not be shown. The defence f
need only show that there is a triable issue or question or that for some other reason there
ought to be a trial, and leave to defend ought to be given. In fact even though the defence
is not clearly established, but only reasonable probability of there being a real defence, leave
to defend should be given (Manager v. Cash [1889] 5 TLR 271).
The words used in the present O. 14 r. 3(1) that the defendant should have leave to defend
if he satisfies the Court “that there ought for some other reason to be a trial” of the claim g
are wider in their scope than the former O. 14 r. 1 which provided that the defendant should
have leave to defend if he “shall disclose such facts as may be deemed sufficient to entitle
him to defend the action generally.” It was stated by Megarry J in Miles v. Bulls [1969] 1
QB 258; [1968] 3 AER 632 that it sometimes happens that the defendant may not be able to
pin-point any precise “issue or question in dispute which ought to be tried,” nevertheless it
is apparent that for some other reason there ought to be a trial, for example where a question h
of fact as to whether the plaintif has fulfilled his part of the contract (Ford v. Harvey [1893]
9 TLR 328) or against a surety where there is a reasonable doubt of his liability (Lloyds
Banking Co v. Ogle [1876] 1 Ex. D 263).
Moreover when an O. 14 appeal has been heard by a lower Court, the appellate Court would
not interfere with the decision unless special circumstances are shown (see United Malayan i
Banking Corp. Ltd. v. Ipoh Mining Co. (M) Ltd. [1964] MLJ 69). In that case, the former
 Current Law Journal
26 Reprint [1992] 1 CLJ (Rep)

a Federal Court followed its decision in Ho Chooi Soon v. The Indian Overseas Bank Ltd.
[1961] MLJ 86 and the old English case of Wing v. Thurlow 10 TLR 151. In the present case,
I was unable to detect any special circumstances and I was of the view that Lim Beng Choon
J was right in holding that the issues referred to above ought to be tried and that the appellant
was not entitled to obtain summary judgment under O. 14.
Further, reference might be made to the decision of this Court in Alloy Automotive Sdn.
b
Bhd. v. Perusahaan Ironfield Sdn. Bhd. [1986] CLJ (Rep) 45, where in a judgment delivered
by Lee Hun Hoe CJ Borneo (as he then was) it was held inter alia that summary jurisdiction
conferred by O. 81, which provides a procedure similar to O. 14, must be used with great
care. In that case, the defence had alleged not only variation but also estoppel and in view
of that it could not be said that liability for breach of contract had been clearly established
and that unconditional leave to defend should be given.
c
This was not an uncontested case and in my view it was not uncontestable. The respondents
have reasonable grounds for setting up a bona fide defence although it might be argued
that the defence is not likely to succeed. However, the respondents should not be shut out
from laying their defence and there are reasons why there ought to be a trial. In all the
circumstances of this case, I would therefore dismiss the appeal with costs.
d
Also found at [1992] 1 CLJ 627